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Translation
Signed Copy
May 10, 2006
EQUITY TRANSFER AGREEMENT OF
SHANDONG ECONOMIC OBSERVING NEWSPAPER CO. LTD
AND
BEIJING TAIDE ADVERTISING CO. LTD
WITH RESPECT TO
BEIJING JINGGUAN XINCHENG ADVERTISING CO. LTD
2006
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TABLE OF CONTENT
Article 1 Equity Transfer
Article 2 Equity Transfer Price
Article 3 Articles of Association Amendments
Article 4 Transferor's Warranties
Article 5 Transferee's Warranties
Article 6 Sharing of Profits and Losses after Equity Transfer
Article 7 Tax
Article 8 Transfer of the Agreement
Article 9 Confidentiality
Article 10 Liabilities for Breaching the Agreement
Article 11 Notifications
Article 12 Changes and Amendments
Article 13 Applicable Laws and Dispute Resolution
Article 14 Interpretation of the Agreement
Article 15 Effects and Languages
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EQUITY TRANSFER AGREEMENT
This agreement was signed by the following parties in Beijing on May 10, 2006.
1. The transferor: Shandong Economic Observing Newspaper Co. Ltd (hereafter as
"Newspaper Co.")
Address: 22 Leyuan Ave., Jinan City, Shandong Province, China
Legal Representative: Ma Liqiang
2. The transferee: Beijing Taide Advertising Co. Ltd (hereafter as the
"Purchaser")
Address: Room 103, Unit 2, Red Building 16
Block 5, Beijing Sports and Kinesiology University
East Yuanmingyuan Road, Haidian District, Beijing
Legal Representative: Wang Yonghong
Whereas:
1. Beijing Jingguan Xincheng Advertising Co. Ltd (hereafter as "Jingguan
Xincheng") is a corporation with limited liabilities (a single legal-person
ownership), incorporated according to the laws of PRC, with its location at
18-C66 Construction Road, Liangxiang Kaixuan Ave., Fangshan District,
Beijing, with a registered capital of RMB 5,000,000, and with a business
scope in advertisement agency and distribution.
2. The Newspaper Co. is a corporation with limited liabilities and
incorporated according to the PRC laws, and is the only equity owner of
Jingguan Xincheng. On the signing date of this agreement, the Newspaper Co.
holds 100% of the equity of Jingguan Xincheng;
After consultation in the spirit of equality, the parties agree to
implement this equity transfer of Jingguan Xincheng pursuant to the
transfer articles and conditions stipulated in this agreement. Therefore,
the parties have agreed on the following:
ARTICLE 1 EQUITY TRANSFER
1.1 The parties agree: The Newspaper Co. agrees to transfer 50% of the equity
of Jingguan Xincheng that the Newspaper Co. holds to the Purchaser pursuant
to the terms in this agreement, and the Purchaser agrees to accept the
aforementioned 50% of the equity of Jingguan Xincheng held by the Newspaper
Co. pursuant to the terms in this agreement (hereafter as "this equity
transfer"). After the completion of this equity transfer, the Newspaper Co.
and the Purchaser both hold 50% of the equity of Jingguan Xincheng.
1.2 Within 10 business days upon the execution of this agreement, the parties
shall jointly conduct the transfer procedures of the concerned equity
transfer pursuant
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to the relevant laws and regulations, and to the requirements of government
administrations or authorized departments, including but not limited to
conducting changes in the equity in the registration with the Industry and
Commerce Administration Bureau Administration Bureau. All parties shall
unconditionally submit all the required written materials to perform this
agreement.
ARTICLE 2 EQUITY TRANSFER PRICE
2.1 After consultation, the parties agree on the specified price for the
concerned equity transfer, totalling RMB 2,500,000 (hereafter as "equity
transfer price").
2.2 After the Newspaper Co. completes this equity transfer and changes of
registration of the new Articles of Association with the Industry and
Commerce Administration Bureau pursuant to the terms stipulated in this
agreement, the Purchaser shall make a one-time full payment at the
aforementioned equity transfer price within the time limit agreed upon by
the two parties to the bank account designated by the Newspaper Co.
ARTICLE 3 ARTICLES OF ASSOCIATION AMENDMENTS
3.1 At the same time as signing this agreement, the parties shall sign the
Articles of Association of Jingguan Xincheng (hereafter as "new Articles of
Association"). The parties agree that while the new Articles of Association
is registered with the Industry and Commerce Administration Bureau, a Board
of Directors of Jingguan Xincheng shall be set up according to the new
Articles of Association to allow adjustment in the management staff.
3.2 The parties agree that after this equity transfer, the Board of Directors
of Jingguan Xincheng shall consist of 5 members, with 3 of them appointed
by the Purchaser and the Purchaser as soon as possible notify the Newspaper
Co. of the list of its appointed directors.
ARTICLE 4 TRANSFEROR'S WARRANTIES
4.1 On the signing date of this agreement, the Newspaper Co. warrants that:
(1) The Newspaper Co. is a lawfully subsisting business entity that is
lawfully incorporated according to the laws of the People's Republic
of China.
(2) The Newspaper Co. signs and performs this agreement:
(i) within the power and business scope of the Newspaper Co.;
(ii) and has adopted or will adopt necessary corporate conduct to give
appropriate authorization;
(iii) not violating the laws that are binding on or having impact on
the Newspaper Co. or violating the restrictions of contracts;
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(3) When signing this agreement, the Newspaper Co. has effectively
obtained ownership, usage, benefit and disposition rights to the
equity intended to be transferred to the Purchaser pursuant to this
agreement, and the equity intended for the transfer has not been
seized by the government, frozen, or placed with any guarantee rights.
4.2 The Newspaper Co. is committed to all economic and legal liabilities that
arise from violating the warranties in the above articles and committed to
payments for causing any possible losses to the Purchaser, except for where
it is due to the Purchaser's reasons that cause the Newspaper Co. to
violate the warranties in the above articles.
ARTICLE 5 TRANSFEREE'S WARRANTIES
5.1 On the signing date of this agreement, the Purchaser warrants that:
(1) The Purchaser is a lawfully subsisting business entity that is
lawfully incorporated according to the laws of the People's Republic
of China;
(2) The Purchaser signs and performs this agreement:
(i) within the Purchaser's rights and business scope;
(ii) and has adopted necessary corporate conduct to give appropriate
authorization;
(iii) not violating the laws that are binding on or having impact on
the Purchaser or violating the restrictions of contracts.
5.2 The Purchaser is committed to all economic and legal liabilities that arise
from violating the warranties in the above article(s) and committed to
payments for causing any possible losses to the Newspaper Co., except for
where it is due to the Newspaper's reasons that cause the Purchaser to
violate the warranties in the above article(s).
ARTICLE 6 SHARING OF PROFITS AND LOSSES AFTER EQUITY TRANSFER
6.1 From the date of the equity changes, the profits and losses of Jingguan
Xincheng shall be allocated according to the proportions of equity held by
Jingguan Xincheng and the Purchaser after this equity transfer.
ARTICLE 7 TAX
7.1 Except where there are other agreements between the two parties, the tax
expense involved in this equity transfer under this agreement is to be
lawfully borne respectively by the parties and Jingguan Xincheng pursuant
to the laws of the People's Republic of China and to the current relevant
regulations specified by relevant government departments.
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ARTICLE 8 TRANSFER OF THE AGREEMENT
8.1 Unless approved in writing by the other party, neither party shall transfer
this agreement or any part of this agreement or any rights, benefits and
duties under this agreement to any third party; however, if the Purchaser
transfers its equity of Jingguan Xincheng to a third party, the Purchaser
has the right to transfer its rights, benefits and/or duties under this
agreement to the third party, who is the transferee of the equity.
ARTICLE 9 CONFIDENTIALITY
9.1 Upon execution of this agreement, unless with advance written approval from
the other party, each party should be committed to the following duties of
confidentiality, whether or not this equity transfer is completed or
whether or not this agreement has been terminated, discontinued, dismissed,
believed to be invalid or is completed:
(1) None of the parties shall disclose to any third party this agreement
and the transactions under this agreement and any documents related to
this equity transfer (hereafter as "confidential documents");
(2) The parties can only use the confidential documents and their content
for the purpose of transactions under this agreement and not for any
other purpose.
9.2 If the parties in this agreement disclose confidential documents for the
following reasons, they are not restricted by article 9.1:
(1) Disclose to the parties in this agreement, to the directors,
supervisors, and senior management of Jingguan Xincheng, and to the
financial consultants, accountants and lawyers hired by the parties;
(2) Disclose because of observing the obligatory rules of laws and
regulations;
(3) Disclose because of the obligatory requirements of government
administrations.
ARTICLE 10 LIABILITIES FOR BREACHING THE AGREEMENT
10.1 If a party in this agreement breaches the agreement and causes the
agreement not to be performed or not to be fully performed, the liabilities
arising from breaching shall be borne by the breaching party. If both
parties breach the agreement, then each party should bear the liabilities
arising from its own breaching.
10.2 From the date of signing this agreement, if the implementation of the
agreement requires both parties to cooperate in preparing for application
materials, official
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stamps and other issues, both parties shall reasonably and actively
cooperate and shall never delay; otherwise, the party which caused losses
to the other party shall be liable for indemnity.
10.3 For liabilities due to Force Majeure and not due to either of the parties,
thus leading to inability to complete this equity transfer, both parties
shall be mutually exempt from legal liabilities.
10.4 In case there are errors of either party that lead to inability to perform
the application for approval of this equity transfer and to perform the
procedure for changes in the registration with the Industry and Commerce
Administration Bureau pursuant to the terms in this agreement, the party
committing errors shall compensate the party conforming to the agreement
for the actual losses in full amounts.
10.5 This article shall still survive even if this agreement is terminated,
discontinued, dismissed or believed to be invalid.
ARTICLE 11 NOTIFICATIONS
11.1 Any notification under this agreement or notifications related to this
agreement sent by any party in this agreement shall be in writing. In the
case of delivery by a designated person, or sending a registered mail to an
address the addressee provided in writing 10 days in advance, it is
considered to have been delivered:
11.2 Any notification delivered by a designated person is deemed to have been
delivered upon the signing by the addressee. If a registered mail is used,
it is deemed to have been delivered 7 days after it was sent to the address
of the addressee.
ARTICLE 12 CHANGES AND AMENDMENTS
12.1 The changes and amendments to this agreement should be made in writing
after both parties consult with each other and reach consensus.
12.2 The changes and amendments to this agreement constitute an inseparable part
of this agreement.
ARTICLE 13 APPLICABLE LAWS AND DISPUTE RESOLUTION
13.1 This agreement is governed under the jurisdiction of the laws of the
People's Republic of China.
13.2 All disputes arising from the implementation of this agreement shall be
resolved by way of friendly consultation between the two parties. If a
consultation fails, the
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dispute shall be submitted to Shanghai Sub-Committee of China International
Economic and Trade Arbitration Committee for it to mediate according to the
applicable and effective arbitration rules at the time of the submission
for arbitration, and the award from arbitration shall be final and binding
on both parties.
13.3 The arbitration award is final and is binding on each party. The
arbitration fee is borne by the losing party.
13.4 Except for issues of disputes submitted for arbitration, the parties shall
continue to perform the other articles of this agreement.
ARTICLE 14 INTERPRETATION OF THE AGREEMENT
14.1 When controversy happens among the parties in the understanding of the
articles in this agreement, it is up to the two parties to jointly
interpret according to the principles of honesty, credibility, fairness,
and rationality as well as according to transaction conventions. If no
unified interpretation can be reached, it shall be dealt with according to
Article 13 herein.
ARTICLE 15 EFFECTS AND LANGUAGES
15.1 This agreement is established and comes into effect on the date when it is
signed or officially stamped by the authorized representatives from both
parties.
15.2 This agreement is written in Chinese, and has no duplicates in other
languages.
15.3 This agreement comes in 4 original copies, one for each party and the rest
for use in submitting to government administrations for review and approval
and for conducting changes in the registration with the Industry and
Commerce Administration Bureau.
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THE SIGNATURE PAGE FOR THE
"EQUITY TRANSFER AGREEMENT
WITH RESPECT TO
BEIJING JINGGUAN XINCHENG ADVERTISING CO. LTD"
Transferor
The Newspaper Co.: Shandong Economic Observing Newspaper Co., Ltd. [Company chop
of Shandong Economic Observing Newspaper Co., Ltd.]
Authorized Representative: /s/
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Transferee
The Purchaser: Beijing Taide Advertising Co., Ltd. [Company chop of Beijing
Taide Advertising Co., Ltd.]
Authorized Representative: /s/
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